Title: Surprise Attack Raises Concerns, Fed Official’s Comments Ease Market Declines
The Dow Jones and S&P 500 briefly turned positive after a surprise attack by Hamas in Israel raised geopolitical concerns, but declines in equities were moderated by comments from Dallas Federal Reserve Bank President Lorie Logan, indicating a potential decrease in the need for further interest rate hikes.
As a result, the Dow Jones Industrial Average was down 0.1% at 33,388, while the S&P 500 fell 0.1% to 4,306. The Nasdaq Composite also witnessed a drop of 0.3% to 13,386.
Earlier in the week, stocks experienced a bounce following a stronger-than-expected jobs report for September, which ultimately led to a 0.5% increase in the S&P 500 for the week. On the other hand, the Dow experienced a 0.3% decline, while the Nasdaq Composite rose 1.6%.
Understandably, the attack by Hamas raised concerns of a broader conflict, causing crude oil prices to rise. This, in turn, increased support for safe-haven assets such as gold, the dollar, and US Treasury futures. However, the impact on US stocks remained relatively modest.
Crude oil prices surged approximately 4% due to worries about potential disruptions in oil supplies from the region, affecting the global energy benchmark, Brent crude.
However, Lorie Logan’s comments on interest rates brought some relief to investors. Her remarks indicated that the surge in long-term Treasury yields may potentially reduce the need for the Federal Reserve to raise the fed-funds rate, as high rates could be attributed to higher term premiums.
Market analysts responded positively to Logan’s comments, leading to some recovery in US stocks. Investors now have their focus set on monetary and corporate issues this week.
Upcoming data on US producer and consumer prices for September will be published, alongside the start of the third-quarter company earnings season. Forecasters predict a decline in aggregate S&P 500 earnings for the year, which has made analysts less confident about corporate profitability.
“Entrepreneur. Music enthusiast. Lifelong communicator. General coffee aficionado. Internet scholar.”